Skip to main content

FM warns defaulters: Clear dues or give control to others

FM warns defaulters: Clear dues or give control to others
Finance Minister Arun Jaitley Thursday issued a stern warning to big loan defaulters responsible for a steep rise in the bad loans or non-performing assets of the public sector banks. He warned them either to clear their dues or allow others to take control of their companies.
However the finance minister admitted that there is no short term solutions to the problem of bad loans.
Jaitley said: “You can’t have a surgical solution to it.”
Rising NPAs or non performing assets of public sector banks have seen sharp rise in recent years.
The RBI has already recommended banks to initiate insolvency proceedings against 12 large defaulters.
As per an official reply given in the Rajya Sabha in the Monsoon session, the total advances to corporate sector in 2017 were around 18 lakh crore rupees and nearly 15% (14.83%) or 3.44 lakh crore rupees were declared as non perorming assets (NPAs).
As per the official reply in the Rajya Sabha, as on March 31, 2017 the gross NPAs of public sector banks in iron and steel sector alone was Rs. 165,661 crore and for power sector it was Rs.30,380 crore which is 56% of the total NPAs of advances given by the public sector banks to corporate sector.
Jaitley also said that consolidation of PSU banks was on cards as the country needs fewer but stronger banks.
Defending the demonetisation a day after the release of RBI data that disclosed that nearly 99% of the total banned notes had come bank in the banking sector, Jaitley said the fallout of demonetisation was on predicted lines and the economy would benefit in medium and long term.
Jaitley said the fact that money got deposited in banks did not mean that all of it is legitimate money.
“It’s nobody’s case that black money has been completely eliminated after demonetisation,” he said.
Jaitley said demonetisation, coupled with GST, will give a “significant boost” to direct tax revenues as many people have come under the tax net.
Although an overwhelming amount of money was deposited in banks it is not a concern for the government as it is good for the economy that more money has come into the formal system.
“The fallout of demonetisation is on predicted lines…the fact that money got deposited in banks doesn’t make it legitimate money,” he said, adding the country was ready for demonetisation even though there was political resistance.
The RBI yesterday said about 99 per cent of Rs 15.44 lakh crore demonetised currency came back into the system.
On the Goods and Services Tax (GST), Jaitley said its inflationary impact has been avoided and there is a scope of convergence of tax rates going forward.
The Economic Times, New Delhi, 01st September 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…